New York, 1 October (Argus) —
Singapore
Prices remain unchanged in the week of 24-28 September at $300-310/t fob for Singapore spot bulk cargoes as most suppliers have settled in previous weeks. The stronger fob prices in Singapore compared with other parts of the region meant that buyers for October spot cargoes came mostly from Indonesia and Vietnam, where freight rates for those routes are lower.
The comparatively higher prices in Singapore meant that in Malaysia, some buyers showed a preference for cheaper domestic cargoes rather than truck deliveries from Singapore. Ex-refinery prices to Malaysia remain unchanged as high production costs prevented producers from offering further discounts.
Production in October is expected to return to normal after supplies dipped in August and September. Demand is expected to be firm in the coming months from southeast Asia along with additional requirement from Australia and New Zealand.
Malaysia
Rainy weather in the last fortnight dampened demand despite this period typically being strong in previous years. More road paving activities are usually carried out to cater to increased highway traffic as the country’s Muslim majority travel to their hometowns for the Hari Raya Aid-il-fitri holiday. But some market participants are hopeful that demand will pick up after the holiday.
Domestic rack prices by the state producer dropped slightly to 1,120-1,150 ringgit/t ($330-339) from 1,125-1165 ringgit/t in the week ending 22 September.
Indonesia
Indonesian demand is picking up for October and November and imports having been making their way from Singapore, Thailand, and Taiwan to various ports. Demand in the Java region has been steadily rising in recent weeks but there has been a slight drop in demand in Sumatra due to a delay in government funding, market sources say.
Prices from Singapore are in the region of $300-310, while 3,000t from Thailand was said to have been sold at $335/t cfr and around 1,800-1,900t has been shipped from Taiwan at $325 cfr. Domestic volumes offered by the state supplier are unchanged at $340/t cfr.
Thailand
More volumes to be delivered in October traded in the week ending 28 September at slightly stronger prices of $280-285/t fob compared with some earlier traded cargoes. This brought prices for Thailand up by $10/t, bringing them closer to prices in the higher end of the range in southeast Asia.
These shipments for October are bound for Indonesia, Vietnam and even a couple to buyers in China. Most refiners are now sold out but one other producer in Rayong is said to have some volumes still available for spot sale. But port capacity at Rayong might limit how soon these volumes can be sold.
Japan
A refiner is expected to have three or four spot cargoes for export available for October depending on how strong prices are in the coming weeks. Priority is likely to be given to Chinese buyers but southeast Asian buyers are likely to be considered if demand does not improve in China. The refiner has a month-long planned maintenance shutdown at its Mizushima refinery coming up in the middle of October, and asphalt production is expected to be affected.
Domestic prices for the fourth quarter of this year have increased to ¥50,000-51,000/t ($461-440) in line with increased feedstock prices, stronger fuel oil values and anticipated high winter demand. Road paving activity is traditionally at its peak in the winter months.
South Korea
Prices remain unchanged as negotiations for October cargoes are said to be still taking place. The three-day Ch’usok holiday or Harvest Moon festival, at the start of the week ending 28 September also contributed to a later start in negotiations. Some producers are holding back in light of the current weak cfr prices to China.
China
Market sentiment remained poor. Posted prices from domestic refineries are unchanged, but traded prices are slightly down.
The lukewarm demand urged many refineries to reduce production, or switch to producing residue oil. Some have even shut down due to negative margins. Petrochina Lanzhou and Petrochina Yumen in northwest China are heard to have stopped production of asphalt. In east China, CNOOC Asphalt and Petrochina Wenzhou are producing residue oil instead. CNOOC Daxie is producing mostly residue oil, but it still retains a small percentage of asphalt production. In south China, Petrochina Gaofu has reduced its normal asphalt production volumes by around a half.
In east China, road building asphalt from domestic refineries largely traded around 2650-2750 Yuan/t ($353-366), down by Yn50/t from a week earlier. Some have slashed prices to Yn2600/t for poorer grades. To attract buyers from outside their province, refineries normally sell at Yn150-160/t lower to compensate for transportation fees. The traded price in south China was around Yn2650-2700/t.
Cfr prices for imported grades were unchanged but sentiment was weaker. China imported 302,300t of asphalt in August, down by 22.2pc from the same period a year ago. The total import for Jan-Aug was 2.64mn t, up by 2.4pc from the same period last year.
Taiwan
Fob prices are unchanged. There is a possible spot tender of 3,500-4,000t for October delivery that has still not been confirmed.
India
Prolonged monsoon weather is expected to delay the pick up in domestic demand by 10 days this year. In September, heavy rains arrived in the eastern part of the country with the coastal areas being worst hit in Balasore, Bhadrak, Jajpur, Kendrapara, Cuttack, Jagatsinghpur, Khurda and Puri.
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